TMI Indicators: December Commodity Sentiment - Restocking into Winter on Pent-Up Demand Expectations

TMI Snapshot:  Update on Bitcoin Vs. Gold Via Text Mining

TMI Indicators: Commodity Sentiment Review - Restocking On, But China Macro Momentum May Have Peaked

Introducing TMI Data Science: Delivering Alpha With Custom NLP-Based Leading Indicators

TMI Indicators:  November Commodity Sentiment - Base Overshoots, Ferrous Improves, Gold Bottoming?

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

Cross Asset Strategy

Multiple Countries / Cross Asset Strategy

<ul>
<li>We examine a range of gold-related custom indicators to chart the thematic catalysts for gold's persistent weakness since August</li>
<li>Inflation hedging interest is back, having last spiked with gold in early August; but as our text-mining highlights, inflation hedging is now primarily associated with cryptocurrencies rather than precious metals </li>
<li> Gold saw a post-election false start which was abruptly halted by a barrage of vaccine news, and more recently hints of an orderly presidential transition; as a result of lingering post-election dissonance, our diffusion of positive vs. negative gold commentary does not point to imminent reversal from recent negative trends</li>
<li>Global financial media discussion of stimulus has dropped to a YTD low, which appears to be strongly correlated with gold's recent move, replaced by a spike in discussion of easing financial conditions</li>
<li>After a September-October hiatus, we see an upward slope in our text-mined weak-USD expressions indicator in recent weeks, though far less dramatic than the multi-STDEV spike seen over the summer</li>
<li>Mentions of tail risk hedging declined to a 14-month low, having peaked in early April</li>
<li>With gold/SPX T6M correlation running at a decade-high +87% in September, gold's traditional "uncorrelated" portfolio function has been called into question for good reason; similarly, positive gold/USD correlations in the past 3-4 months have not inspired confidence, but given the short interval this does not stand out as abnormally dysfunctional</li>
<li>Overall, we see gold-positive inflation hedge demand, persistent pressure on USD and easing financial conditions as currently more than offset by gold's recent dysfunctions, BTC's emergence as competing inflation hedge, lack of interest in tail risk hedging and falling stimulus expectations; we see short-term downside limited to ~1x STDEV or $1700-1725/oz based on the current data set, following significant unwind of speculative interest and ETF outflows</li>
</ul><div class="content-highlight"><p>TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </p></div>


We examine a range of gold-related custom indicators to chart the thematic catalysts for gold's persistent weakness since August
Inflation hedging interest is back, having last spiked with gold in early August; but as our text-mining highlights, inflation hedging is now primarily associated with cryptocurrencies rather than precious metals 
 Gold saw a post-election false start which was abruptly halted by a barrage of vaccine news, and more recently hints of an orderly presidential transition; as a result of lingering post-election dissonance, our diffusion of positive vs. negative gold commentary does not point to imminent reversal from recent negative trends
Global financial media discussion of stimulus has dropped to a YTD low, which appears to be strongly correlated with gold's recent move, replaced by a spike in discussion of easing financial conditions
After a September-October hiatus, we see an upward slope in our text-mined weak-USD expressions indicator in recent weeks, though far less dramatic than the multi-STDEV spike seen over the summer
Mentions of tail risk hedging declined to a 14-month low, having peaked in early April
With gold/SPX T6M correlation running at a decade-high +87% in September, gold's traditional "uncorrelated" portfolio function has been called into question for good reason; similarly, positive gold/USD correlations in the past 3-4 months have not inspired confidence, but given the short interval this does not stand out as abnormally dysfunctional
Overall, we see gold-positive inflation hedge demand, persistent pressure on USD and easing financial conditions as currently more than offset by gold's recent dysfunctions, BTC's emergence as competing inflation hedge, lack of interest in tail risk hedging and falling stimulus expectations; we see short-term downside limited to ~1x STDEV or $1700-1725/oz based on the current data set, following significant unwind of speculative interest and ETF outflows
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Snapshot: Text-Mining the Thematics Behind Gold's Disappointing Fall